FCA sets out changes the UK equity IPO process

The FCA published a consultation CP17/5 on 1 March 2017 on reforming the availability of information in the UK equity market IPO process. The FCA's proposed changes are significant and are the culmination of a body of work that began in May 2015 with its Investment and Corporate Banking Market Study. This consultation paper is one part of the remedies arising from that market study.

The FCA proposes a package of policy measures intended to improve the range and quality of information available to investors during the IPO process. These include:

  • measures to ensure that a prospectus or registration document is published, and providers of ‘unconnected research’ have access to issuers’ management, before any connected research is released
  • new guidance clarifying clarifying the FCA’s expectations on analysts’ interactions with the issuer’s management and their corporate finance advisers when considering the IPO mandate and a bank’s syndicate positioning. 

The FCA hopes its proposals will help to address what it perceives to be weaknesses in current market practice, particularly the conflicts of interest that can arise between issuers and syndicate banks. 

The At a glance analysis below sets out the next steps and what it means for firms.

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